Oregon 36% APR Cap Under Challenge: Implications for State-Chartered Bank Partnership Programs
Oregon 36% APR Cap Under Challenge: Implications for State-Chartered Bank Partnership Programs
On June 15, 2026, several industry trade groups filed a lawsuit seeking to enjoin Oregon’s recently-enacted DIDMCA opt-out law, H.B. 4116. The law took effect on June 5, 2026, and applies to covered loans made in Oregon after that date.
The opt-out affects state-chartered banks and fintechs that partner with them for lending programs. National banks and their lending partners are not affected.
Background – DIDMCA and Rate Exportation
The Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”) allows state-chartered, FDIC-insured banks to charge interest rates authorized by a single state—typically their home state—to borrowers nationwide, a practice known as “rate exportation.” This authority mirrors that of national banks under federal law. However, DIDMCA permits individual states to “opt out” and apply their own interest rate limits to loans “made in” that state.
Oregon is now one of four jurisdictions with a current DIDMCA opt-out, along with Iowa, Puerto Rico, and Colorado (whose opt-out is currently being challenged in court). Similar legislation is pending or under consideration in other states.
The Oregon Law
Oregon’s opt-out requires out-of-state, state-chartered banks to comply with Oregon’s 36% APR cap on “consumer finance loans” of $50,000 or less made to Oregon consumers.
“Consumer finance loan” means a loan or line of credit that is unsecured or secured by personal or real property and that has periodic payments and terms longer than 60 days.
Recommended Actions for Fintechs and State-Chartered Banks
State-chartered banks and fintechs that partner with them for lending programs should:
Assess whether they make (or are involved in a program that makes) “consumer finance loans” of $50,000 or less that would be subject to Oregon’s 36% rate cap.
If so, develop a compliance plan and strategy. Even if the court grants an injunction, the law is currently in effect and may ultimately be upheld. The risks of making covered loans after the effective date should be evaluated.
Determine compliance responsibilities for program loans under the applicable bank partnership agreement. Under most bank partnership programs, fintechs are contractually responsible for the legal compliance of program loans, including interest rate and usury compliance. Banks, however, retain an independent legal obligation to comply with applicable interest and usury laws, regardless of the bank partnership agreement terms.
Confirm or evaluate compliance with interest and usury limitations in Colorado, Iowa, and Puerto Rico, given the DIDMCA opt-outs in those states.
Monitor litigation developments in Oregon and Colorado related to their DIDMCA opt-outs. Monitor legislative developments regarding DIDMCA opt-outs in other states and federal efforts to repeal the availability of DIDMCA opt-outs (e.g., the American Lending Fairness Act of 2026).
For questions about Oregon’s opt-out or DIDMCA opt-outs generally, please contact Chris Napier and Chris Kushmider.
Download a PDF copy.
About The Author
Chris Napier is a Partner at Mitchell Sandler. His practice focuses on providing regulatory counseling, strategic advice and representation during government enforcement matters, including matters involving commercial, consumer and alternative credit products; money transmission and payments; deposit issues; and partnerships between fintech companies, depository institutions, and lenders.
Chris Kushmider is Counsel at Mitchell Sandler. His practice focuses on transactional and corporate matters for a wide range of bank and non-bank clients in financial services, including mortgage companies and fintech lenders. He is experienced in M&A and securities transactions as well as a wide variety of contract types: master services and supplier agreements, loan purchase and servicing agreements, bank partnership arrangements, credit agreements, and CRA qualifying investments and including EQ2s. Chris has also advised on regulatory matters related to making, brokering, and servicing commercial loans, consumer loans, and retail installment sales contracts.
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